Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same.
c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
e. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
.D
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A. The downward slope B. The upward slope C. The constant slope D. The curvature
One of the reasons economists approve of limiting trade would be
A. the preservation of a large-production company. B. the preservation of a high-wage company. C. the protection of the environment. D. the preservation of a high-employment company.